On May 16, European Union member states unanimously granted final approval to the world’s first comprehensive set of rules designed to regulate cryptoassets. This move has placed additional pressure on countries like Britain and the United States to catch up and establish their own regulatory frameworks.
During a meeting in Brussels, EU finance ministers endorsed the regulations that were previously negotiated with the European Parliament, which had given its approval in April. The implementation of these rules is expected to commence from 2024 onwards.
The urgency for crypto regulation has heightened following the collapse of the FTX cryptocurrency exchange. Elisabeth Svantesson, the finance minister for Sweden, which currently holds the EU presidency, emphasized the necessity for rules that safeguard European investors and prevent the exploitation of the crypto industry for money laundering and terrorism financing.
Under these new regulations, companies seeking to issue, trade, and safeguard cryptoassets, tokenized assets, and stablecoins within the EU’s 27 member states will be required to obtain a license.
Ministers also took measures to combat tax evasion and money laundering associated with cryptoasset transfers by enhancing transaction traceability. Starting from January 2026, service providers must collect the names of senders and beneficiaries involved in cryptoasset transactions, regardless of the transfer amount.
Furthermore, agreement was reached on amending taxation cooperation rules among member countries to cover crypto-asset transactions and exchanging information on advance tax rulings for high-net-worth individuals.
Crypto firms have expressed their desire for regulatory certainty, increasing the pressure on countries to emulate the EU’s regulatory standards. Additionally, this calls for global standards to govern cross-border crypto activities.
The approach taken by Britain involves a phased regulatory framework, initially focusing on stablecoins and later expanding to un-backed cryptoassets, although no specific timeline has been established.
Meanwhile, the United States has primarily relied on existing securities regulations for enforcement actions within the crypto sector. The country is still deliberating whether to introduce bespoke regulatory rules and determining which regulatory bodies would oversee them. Hester Peirce, one of the commissioners at the U.S. derivatives regulator CFTC, acknowledged the ongoing discussions within federal and state authorities regarding their potential oversight roles in the crypto sector.
As the crypto industry continues to evolve, regulators worldwide are grappling with finding effective oversight mechanisms. The implementation of the EU’s comprehensive regulations marks a significant milestone in establishing a regulated and secure environment for cryptocurrencies and sets the stage for global coordination in the future.